Question

Assume that Japan and the United States are engaged in the United States for their vacations, a system of flexible exchange rates. If more Japanese tourists decide to visit Multiple Choice the yen will depreciate and the U.S. dollar will appreciate. the yen will appreciate and the U.S. dollar will depreciate the yen and the U.S dollar will appreciate the yen and the U.S. dollar will depreciate < Prev 46 of 48Hİ Next >

Answer 1

The Japanese Yen exchange rate. If Japanese tourist decided to visit the U.S for their vacation, increase the supply of Yen in the Foreign Exchange Market resulted a righthand shift of Yen supply curve, which further leads to fall in exchange rate from e to e_1 It means, here the values of Yen will depreciate and U.S dollar value appreciate. So, the correct answer is an option (A). The initial demand and supply of Peso is shown by D_1 and S_1. These two curve intersect at point a. corresponding to point a, the dollar price of peso is B. The point B shows the how many unit of dollar will get in exchange of one peso.(The exchange rate b/w dollar and Peso) So, the correct answer is an option [c], i.e, B dollars for one peso.